Pathogenic hantaviruses delay type I interferon response during early stages of viral infection. However, the robust interferon response and induction of interferon stimulated genes, observed during later stages of hantavirus infection fails to combat the virus replication in infected cells. Protein kinase R, a classical interferon stimulated gene product phosphorylates the eukaryotic translation initiation factor eIF2α and causes translation shutdown to create roadblocks for the synthesis of viral proteins. The PKR induced translation shutdown helps host cells to establish an antiviral state to interrupt virus replication. However, hantavirus infected cells do not undergo translation shutdown and fail to establish an antiviral state during the course of viral infection. Here we show for the first time that Andes virus infection induced PKR over-expression. However, the over-expressed PKR was not active due to significant inhibition of autophosphorylation. Further studies revealed that Andes virus nucleocapsid protein inhibited PKR dimerization, a critical step required for PKR autophosphorylation to attain activity. The studies reported here have established hantavirus nucleocapsid protein as a new PKR inhibitor. These studies have provided mechanistic insights for hantavirus resistance to host interferon response and have solved the puzzle for the lack of translation shutdown observed in hantavirus infected cells. The sensitivity of hantavirus replication to PKR has likely imposed a selective evolutionary pressure on hantaviruses to evade PKR antiviral response for survival. We envision that evasion of PKR antiviral response by NP has likely helped hantaviruses to exist during evolution and survive in infected hosts having multifaceted antiviral defense.